Spirit reaches tentative deal with pilots, plans to resume flights

Spirit Airlines reached a tentative agreement with its pilots and flights will resume on June 18, the carrier announced June 16.

The Air Line Pilots Association International (ALPA) and Spirit management had been in continuous mediation since 1 p.m. the day before.

The tentative agreement was subject to completion of contract language and approval of a satisfactory return to work agreement before being presented to the membership for ratification, an ALPA statement said.

Even with the completion of contract issues, additional details still needed to be worked out regarding the important return to work issues, ALPA said. “We expect to update you later today with further news that will be positive. However, until all provisions are completed, we remain on strike.”

The airline was seeking to woo back travelers by offering $50 off their next flight and 5,000 bonus miles.

“We want to thank you for your loyalty, and we hope you accept this gift on behalf of the entire Spirit family,” the company said.

Mike Boyd of Boyd Group International, an Evergreen, Colo.-based aviation-consulting firm, said the company is trying to foster goodwill with those who were affected. However, for the most part, Spirit customers will return quickly for the low fares.

Most Spirit customers fly infrequently and as discretionary travelers, he said. “They are taking people down for their once a year sunburn in the Caribbean.”

He expects a final deal to be approved by ALPA.

Announcement of the potential settlement was a stark contrast to the furlough of more than 600 flight attendants earlier in the week.

When Spirit Airlines pilots walked off the job on June 12 – and the company grounded all flights – the airline’s key role in South Florida came into sharp focus.

The strike focused more national scrutiny on a company that already had mixed reviews for colorful fare promotions, plans to pre-recline some seats and charge for carry-on bags that don’t fit under seats.

The strike started with 500 pilots and quickly broadened to the furlough of flight attendants. Spirit said it could lay off up to 1,583 employees as the state struggles with a 12 percent unemployment rate.

The economic ripples were a concern because Spirit is the largest carrier at Fort Lauderdale-Hollywood International Airport (FLL) – handling 17.8 percent of passengers from January through May. Spirit operates 150 flights a day, and FLL is by far its largest hub.

The strike’s cost to the airport was running about $40,000 a day in fees, airport spokesman Greg Meyer said before the potential settlement was announced. Some airlines were lowering fares to attract Spirit fliers, and one carrier, JetBlue Airways, added an additional route to San Juan, Puerto Rico.

The worry was whether the other airlines could make up all of the gap left by Spirit’s cancellations.

“Approximately 6,400 passengers were enplaned by Spirit daily, of which approximately 5,600 originated at FLL,” Meyer said of Spirit’s average performance leading up to the strike. “Other airlines could currently accommodate about 2,200 of Spirit’s passengers based on current load factors at the airport.”

That left more than 60 percent of Spirit passengers who normally fly from FLL hunting for other options.

Spirit’s ticket prices are considered to be among the lowest in the industry, said Nicki Grossman, president and CEO of the Greater Fort Lauderdale Convention & Visitors Bureau. Without Spirit’s low prices, she was worried that some travelers would not come.

Pay, work rules at issue

The nation’s first major airline strike since 2005 was launched at 5:01 a.m. on June 12 after a 30-day cooling off period and the breakdown of talks with ALPA.

The strike was rooted in disagreements over pay, work rules and benefits, ALPA said. In a June 13 news release, Spirit said it had offered the pilots 47 percent pay increases over five years, but the pilots disputed that assertion.

There was no immediate word on the tentative agreement’s terms.

During the strike, the company said customers could ask for a credit for their flights, plus an additional $100 credit for a future flight. Or, they could ask for a full refund.

One question is whether Spirit will take a hit to its image, but Boyd’s comments indicate that may be short-lived. Numerous news reports included passengers angry about a lack of help from the airline after flights were canceled.

Spirit had an operating profit of $107.1 million on revenue of $699 million in 2009. Its 12.4 percent profit margin in the fourth quarter was the highest of 21 airlines surveyed by the U.S. Department of Transportation.

Boyd, the airline analyst, had predicted a quick end to the strike. “If the strike goes on long, the company isn’t taking in any money.”